Blog /2019 /May /Can your lack of health insurance result in a life insurance claim denial?

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Can your lack of health insurance result in a life insurance claim denial?

May 22, 2019 /
Life Insurance Attorney

Leaving politics out of it, we can probably all agree that we are living in a difficult time when it comes to health care in the United States. Sadly, many people cannot afford health insurance, even though they are federally required to maintain it.

There are all sorts of dangers that result from a lack of health care coverage. One of those dangers is that when you find yourself with an illness or injury, you will try to treat your condition without medical oversight. In fact, these days, people are increasingly turning to friends and even strangers on social media for medical advice and treatment options.

One of the things that happens frequently when a person tries to treat an ailment through friends or family is that those individuals offer up old prescriptions that they are no longer using. In reality, however, this seemingly compassionate act can have all sorts of negative consequences.

For example, if the shared drug is a controlled substance (like Vicodin, Percocet, or Xanax), your friend’s act of providing the drugs can be considered a crime under state or federal law (distribution of a controlled substance). Likewise, your act of taking drugs that were not prescribed to you can also be considered a crime (possession and use of a controlled substance).

On top of the other potentially harmful outcomes of sharing drugs, this scenario can have a devastating impact on the effectiveness of a person's life insurance policy. That is because many policies contain what is known as an “illegal drug exclusion.” That exclusion basically says that if the insured dies with an illegal substance in his bloodstream, the policy will become ineffective and the insurance company will be relieved from its obligation to pay a death benefit to beneficiaries.

This article explores a case where the illegal drug exclusion was invoked by an insurance company and nearly cost a family its financial security.

A seemingly caring act between friends

Glenn was a man in his 60s who was well-liked in his community. He was a part-time electrician, although his body was in so much pain that he wasn’t able to work often. Sadly, he did not make enough money to afford health insurance. That said, he made too much money to receive state-sponsored medical benefits. Despite this, Glenn made sure to maintain the premiums on his life insurance policy. He had had it for over 30 years, and was relying on the policy to give financial security to his wife Mary and their disabled son after his death.

One weekend, Glenn was helping his local parish build a new park for community children. Typical of Glenn, he seemed to work harder than anyone that day, despite being in fairly significant pain. Toward the end of the day, he went to lift a bag of cement and heard a pop in his back. He dropped to his knees instantly.

The other volunteers offered to take him to the hospital but Glenn refused to go. He told them he did not have health insurance and could not afford to take on significant medical bills. His best friend, Michael, volunteered to take him home and get him in a comfortable position. On the way to Glenn’s home, Michael stopped by his own house. He grabbed an old prescription for oxycontin that he had been given following a shoulder surgery but had never used. He was happy to pass the pills onto his friend in order to try to relieve some of the pain.

Glenn accepted the pills but was uncomfortable taking them without a doctor’s input. His wife ended up taking him to an urgent care facility later that evening where he was prescribed the exact same pills Michael had given him earlier in the day. Rather than spend extra money on paying for that prescription without health insurance, Glenn finally decided to just take the pills he received from his friend.

What no one realized was that when Glenn had felt the pain in his back, he had actually torn an adhesion in his bowel that caused a slow but persistent internal bleed. By the next morning, Mary found that Glenn had passed away in his sleep.

The police arrived at the scene and did a brief investigation. Their report noted a bottle of oxycontin next to Glenn’s body that was prescribed to Michael. Mary admitted Glenn had been using the pills. An autopsy report later confirmed that Glenn had oxycontin in his system when he passed away.

The claim denial

Within a week, Mary filed a claim for life insurance benefits. As part of her claim submission, she had to give the life insurer a copy of the police and autopsy reports. Four weeks later, Mary received a claim denial letter in the mail. The letter stated that because Glenn had been taking someone else’s oxycontin prescription, he was taking an “illegal substance,” and thus the illegal drug exclusion nullified the insurer’s obligation to pay. Mary was terrified.

She quickly called an attorney specializing in the wrongful denial of life insurance claims and described the situation. The attorney asked if Mary still had a copy of the oxycontin prescription Glenn had received at urgent care the night before his death . She did. The lawyer indicated that Glenn's life insurance company was fairly reputable and that he had reached successful compromises with them in the past.

The attorney later called an in-house lawyer for the insurer whom he had worked with before and described the situation. Because the two had such a long-standing and respectful working relationship, the in-house attorney took the matter to the company's internal appeals board. Within a couple of weeks, the claim denial was overturned and Mary received the benefit Glenn intended for her.

This case illustrates nicely the difference that can be made when a specialized attorney is called in to deal with the wrongful denial of the life insurance claim. If you have received a claim denial that seems unjust, call us today. We're here to help.

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